Due to the home prices in the LA county and city itself, they have been increasingly high for quite the time now. Whether it is buying or renting, they have been fluctuating significantly to the point where many residents within the area can’t afford them. This then makes the choice of buying or renting a much pressing one to handle and decide.
So, it all comes down to whether the situations you are presented with leans more towards buying or renting the property.
That is why thankfully we have some useful tools such as Zillow that can help provide a few words of advice and guidance when it comes to this crucial decision making. They make sure to help you calculate the break-even points of certain properties as well as checking to see which property overall is the cheapest.
With this calculator presented by Zillow themselves, it has helped track many median priced homes throughout LA and LA county. This has ensured what exactly is their overall values while also making sure that you know where you’re putting your money where it belongs- whether it’s selling a property or putting it off until a nicer investment comes through.
The calculator has estimated roughly that for these median pierced homes they reach about a total of 640k while for a few rental properties they have an averaged pay of 2k per month. In terms of the break even point here, it would mean that it would take a rough six years total for the pay off.
What this means is that it is simply better to rent out than buy a property as the former is and will always been much cheaper than the latter.
Now that doesn’t mean necessarily that this is the case with every home here as there are some that make the exception to the rule in certain cases. There are still plenty of possible factors that need to be taken into consideration when you are considering the break-even point between the two options.
In some cases, there have been people where their ability to buy these properties with lower-upfront costs was worth the possible risks, especially with the considerable factor that was possible high payments for rent. Still, with additional calculations such as the New York Times’ calculator, these rental payments were quite pricey, making it all more reasonable to buy a property instead.
This calculator also has looked at various mortgage rates differently, especially at higher rates. In fact, according to the Freddie Mac indexes, they have seen the interest rates for many homes stand within a 3.7 percent, which is low compared to others in the past. By their own estimations, if the rates jump to about 4.7 percent, then this would make renting the more plausible choice to go with.
With higher interest rates, this could also lead to higher cost mortgage payments during the years of a person’s homeownership.
In terms of right now, the rates are low and makes homes sell out more quickly than ever before. According to a date that was done and published by California Association of Realtors, or CAR, they noticed that the sale prices were rising at fairly modest paces compared to last year, 2019.
What this means is that because of the buyer-friendly levels of conditions being presented to the house market now is suddenly being shifted back towards the sellers instead of the buyers compared to last year. Still, for some, this seems rather discouraging, but can allow for more people to weigh in on the decisions if buying or renting a property is more for them.
Sync Brokerage Real Estate of Los Angeles
syncbrokerage.com
Office 818-770-3673
Email: careers@syncbrokerage.com
Woodland Hills Office
22020 Clarendon St. Suite 200. Woodland Hills, CA 91367
Intersection of Ventura Blvd., & Topanga Canyon Blvd.
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12258 Ventura Blvd, Studio City CA 91604
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